Volume Analysis
Volume Confirmation
Using volume to validate price movements
Volume confirmation is the practice of using trading volume to validate price movements. Strong moves should be accompanied by high volume, while moves on low volume are suspect and may fail.
✓How to Recognize
- •Breakouts with above-average volume
- •Trend continuations with steady volume
- •Reversals with volume spike
- •Low volume suggesting weak conviction
⚡How to Avoid
- →Don't trust breakouts on low volume
- →Wait for volume spike on reversal patterns
- →Compare current volume to recent average
- →Volume leads price - watch for divergences